10 Powerful Leadership Lessons for Web Agency Founders to Maximize Profitability

Running a web agency is pretty much like an adventure, filled with lessons at every turn. In 2023, I stumbled into some insights that I think are gold for anyone in the hustle – whether you're an entrepreneur, a leader, an executive, or managing a team.

I’m sharing these insights not because I’ve got it all figured out. Far from it.

I’m sharing as I navigate through these challenges and learnings myself. It’s a journey of constant growth, and I’m right there with you, figuring things out and reminding myself of these lessons along the way.

So, here’s a little backstory: In Jan 2024, during a strategy camp in Hawaii with my business partner (and Director of Business Development) – yes, Hawaii, with its chill vibes and stunning scenery – we took a moment to reflect on the big challenges and learnings our agency faced in 2023.

It was more than just a meeting; it was a deep dive into understanding and learning from the experiences we’ve had.

And that's what I'm here to share with you in this post. So, from our island reflection to you, here are the key takeaways:

1. Is it Time, Motivation, or Skill Problem?

Aslam and I’ve been complaining that we didn’t have time to work on a few important things in 2023. We also realize that one big motivation for us to become entrepreneurs was to have full freedom and flexibility of time.

It’s true that entrepreneurs and people in more senior roles have more freedom of time, like “choose what to work, when to work, and have more people to delegate.”

So sometimes, I've found that if I'm not getting important tasks done, it's often not about the lack of time. It could be a lack of motivation, or maybe I don't have the right skills yet.

Last year, I noticed some tasks didn't progress as much as I wanted. It was a reminder to myself to look deeper whenever I'm struggling to find time for something. Is it really about time, or is it motivation or skill?

Example: If redesigning your agency’s website keeps getting postponed, it might be more about feeling overwhelmed (or less motivated) than not having time. Consider delegating it to someone else on the team.

2. Focus on 'Who', Not 'How'

In our business journey, it's crucial to get better at giving tasks to others and finding the right people for each challenge. Instead of spending too much time figuring out how to solve a problem, I've learned to think about who can solve it. This approach has helped improve our productivity and profitability. It’s about trusting the team and knowing that it’s okay not to be the one solving every single problem.

Example: For a project needing advanced SEO, instead of figuring it out yourself, identify a team member with SEO expertise or consider hiring a specialist.

Action Items:

• Hire a consultant or expert to solve that problem.

• Hire someone full-time.

• If we can’t find someone to delegate, then do it but keep someone in the team as a co-pilot with you to train (don’t fly solo).

• Book to Read: "Who Not How" by Dan Sullivan and Benjamin Hardy.

3. 80% Instruction + 20% Inspiration

I've discovered that while it's important to give clear instructions, mixing in a bit of inspiration can really boost productivity. Whenever I ask someone to do something, I try to remember to also inspire them. This balance has made a big difference in how motivated and engaged everyone feels.

Example: When assigning a project, share the impact it could have on the client's online presence to inspire the developer, alongside providing the technical requirements.

Action Items: Read this blog → Keeping your Top Talent Engaged.

4. Focus on Frameworks, Not Just Fixes

When people come to me with a problem, I've learned that giving them a quick fix isn't always the best approach. Sharing my way of thinking and decision-making frameworks helps them tackle similar issues on their own in the future. It’s about empowering others to think critically and make decisions.

Example: When my product managers ask me questions related to Multicollab website, like what should be the free trial period, cancellation policy, support response time, etc.

I shared this framework:

• Study the five popular WordPress plugin business and their terms. (I have also shared these 5 plugin names with them).

• Bring 2-3 options from the average or best of what these five companies do. 

• Then I'll help them choose one option. 

5. Pick People + Profit over Project

Balancing client satisfaction with the well-being of our team and our agency’s profitability has been a key focus. Last year, I learned the hard way that sometimes, in our rush to keep clients happy, we might overlook our team's happiness or the project's profitability. It's a tough balance, but it's important to keep in mind that our team and our profit margins are what sustain us in the long run.

Here are a few things we noticed we should do:

• Pushback to the client's unrealistic demands, such as not extending the deadline despite delayed response or confirmation from the client's team.

• Showing courage in asking for Change Requests $$ and an extension on the deadline when there is a CR or new feature.

• Only do work with proper confirmation from the client, even if it delays the project.

6. Quality Decisions, Not Tasks

I've realized that the value I bring isn't in doing a lot of tasks but in making quality decisions. If there’s something routine or maintenance-related that someone with less experience could handle, then I should delegate. It's about using our time where it has the most impact.

Example: If you are an owner or executive, assuming your hourly rate is $400 / hour. (Hourly rate = Total Annual Income / 2000 hours ). If you spend an hour doing things (preparing a presentation, doing research, etc.) that could have been delegated to someone in the team with an hourly rate of $100 or less, then you just cost your company $300 an hour.

Book to Read: Buy Back Your Time by Dan Martell

7. Old Problems Compound

There were a few operational issues that kept coming back, costing us time and resources, even though we thought we had solved them before. It made me see the importance of dedicating proper time and attention to really resolve these issues for good. It’s about not just putting a band-aid on problems but really fixing them because the older the problem, the bigger the cost.

Here are a few examples of such repeated problems that are costing my agency a lot:

• Continuing project work even when invoices are significantly overdue.

• Allocating many hours of work for free that could potentially be billed as change requests (CR).

• Delivering or launching websites without receiving payment confirmation from the finance team.

• Experiencing gaps in communication between project managers and the biz dev team.

• Facing challenges in coordination during the project discovery phase between the biz dev and solution architect teams.

8. Play to Your Superpowers, Delegate to Your Weakness

I've noticed that I do best in tasks and roles that play to my strengths. And it’s okay that some parts of our job might require different skills or personalities. If something isn't a good fit for me, I've learned it's better to delegate that to someone else rather than struggle and let it affect my performance or happiness.

Indeed, there's often a temptation to dive into new areas in an effort to broaden our skill set, which is undoubtedly valuable. However, there's an alternative route to learning that doesn't involve steering the ship solo, especially in territories where we're not as strong. Acting as a co-pilot by supporting someone who leads in that area offers a learning experience that's both enriching and less fraught with pressure.

My partner and I have observed a pattern: whenever we venture into tasks that don't play to our strengths, we either procrastinate or deliver work that's not up to our usual standards. Ultimately, this doesn't just impact us on a personal level; it also affects the overall goals and the well-being of our company.

Action Item: Conducting a time and energy audit is beneficial to clearly identify which tasks are in harmony with your strengths and which are not. [Here is template]

9. As Leader, Be the Air traffic Control, Not the Pilot

Leading a team (of 120+ people) has shown me the importance of being more like air traffic control than trying to pilot every single plane. My job is to oversee and guide, ensuring everything runs smoothly. Sometimes, that means resisting the urge to do things myself and instead making sure everyone else can do their jobs well.

Here are a few rules we wrote down to remind us of this learning:

• Most of your time (like 90% of it) should be spent in the control tower, not in the cockpit.

• If you've gotta fly, make sure you've got a co-pilot or become one.

• Also, don’t be in the air too long. Try to land and return to the control room quickly.

• Be clear when saying "No" if you don't have time.

• Focus on “Who, Not How.”

10. Agency is 90% Efficiency, 10% Innovation Business

My journey has taught me that chasing new, shiny ideas is cool and all, but what really moves the needle for a business is sticking to what works and making smart choices. It's all about keeping your eye on the ball, making sure the main stuff stays main while still leaving a little room (like 10%) for those sparkly innovations.

Take it from Warren Buffett - the guy made his fortune by being super efficient and disciplined, not by jumping on every new trend. This approach has seriously paid off for my agency too. Over the last 15 years, we’ve been rocking a yearly growth rate of 49% and keeping our margins comfy at 39%.

In simple terms, being profitable means doing the less flashy, day-in, day-out work to make the agency run smoother rather than getting distracted by every cool new thing that comes along.

Seth Godin hit the nail on the head when he said, "We often try to hide behind the BIG things, hiding behind creating something GIGANTIC."

That really struck a chord with me. It’s easy to get caught up in wanting to make a big splash, but my biggest takeaway from 2023 is the power of sticking to the basics and fine-tuning what we already do well.

Book to Read: "The Goal: A Process of Ongoing Improvement" by Eliyahu M. Goldratt.